Technical Analysis Logical Flaws

M

MedianVelocity

I have noticed a flaw in a lot of trading systems and technical analysis... A lot of strategies and trading systems seem to be designed just for a specific signal or market conditions... Or market conditions in the past.

Hardly anyone is looking at the bigger picture! It's a changing world and a changing market... In my opinion people need to go back to the basics of tape reading and forget most of the fancy stuff.

A lot of what is shaping market cycles and trends for months in a row is central bank decisions. Not... "Oh, daily RSI is at such and such a 85+ reading, we must top and sell now!"
 
Quote from MedianVelocity:

I have noticed a flaw in a lot of trading systems and technical analysis... A lot of strategies and trading systems seem to be designed just for a specific signal or market conditions... Or market conditions in the past.

Hardly anyone is looking at the bigger picture! It's a changing world and a changing market... In my opinion people need to go back to the basics of tape reading and forget most of the fancy stuff.

A lot of what is shaping market cycles and trends for months in a row is central bank decisions. Not... "Oh, daily RSI is at such and such a 85+ reading, we must top and sell now!"
More...

Now that you know this...you should be able to exploit this flaw.

:cool:
 
Quote from MedianVelocity:

I have noticed a flaw in a lot of trading systems and technical analysis... A lot of strategies and trading systems seem to be designed just for a specific signal or market conditions... Or market conditions in the past.

Hardly anyone is looking at the bigger picture! It's a changing world and a changing market... In my opinion people need to go back to the basics of tape reading and forget most of the fancy stuff.

A lot of what is shaping market cycles and trends for months in a row is central bank decisions. Not... "Oh, daily RSI is at such and such a 85+ reading, we must top and sell now!"
More...

This is your personal opinion.

I have used the same approach for 56 years.

Duing that time, some innovations have occurrred. The PC was one of them.

The system of the market's operation has not changed (based upon the use of deductive processes in a system of the market's operation).

"tape reading" is monitoring and analyzing data flow. Monitoring and analyzing data flow was enhanced in the 70's when RDBMS's were made part of computing.
 
Quote from wrbtrader:

Now that you know this...you should be able to exploit this flaw.

:cool:
More...
+1

On a related note, have you noticed how some people will bash TA in part for using past data, then they advocate something like tape reading which is just as stuck in the past? :D

All these "lag" critics have yet to advocate something that analyzes future data. :D :D
 
TA is questionable....

Where have I seen that before? Can't be from this chap, it's his first post.

People are creatures of habit, behaviour tends to be repetitive. Until AI moves away from the realm of Sci Fi, computers will repeatedly do what they are programmed to do, meaning there will be a finite number of possible responses to any situation, ie repetitive.

So you have price going up, price going down, price range bound. It was that way in the very first market ever, centuries ago, and it is so today. Other aspects like volatility change, but the basics remain the same.
 
Quote from MedianVelocity:

I have noticed a flaw in a lot of trading systems and technical analysis... A lot of strategies and trading systems seem to be designed just for a specific signal or market conditions... Or market conditions in the past.

Hardly anyone is looking at the bigger picture! It's a changing world and a changing market... In my opinion people need to go back to the basics of tape reading and forget most of the fancy stuff.
More...

TA is a philosophy. You must reduce it to practice. The tool for that is math. Philosophers are usually intelligent but never wealthy.

Quote from MedianVelocity:

A lot of what is shaping market cycles and trends for months in a row is central bank decisions. Not... "Oh, daily RSI is at such and such a 85+ reading, we must top and sell now!"
More...

RSI at 85 does not necessarily imply a top. If some guru told you that you must ask your money back. Central banks are just another participant. The philosophy does not change because of another participant. This cannot also be used as an excuse of wrong application of TA.
 
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